UK pension funds and asset managers, some of the biggest buyers of government debt, are sceptical of Chancellor George Osborne's reported plan to issue 100-year gilts to help finance the country's debt burden - but there was also a measure of interest in some quarters.

Osborne is considering the issue of very long dated government debt to take advantage of very low interest rates and the UK's perceived safe-haven status. The Treasury is understood to believe it would be financially advantageous for the government, and taxpayer, to "lock in" to these rates now.

The Treasury declined to comment on any Budget plans this morning. It is likely, however, that the government will start with an industry consultation to thresh out what the bonds might look like and where demand might come from.

But pension funds, which are one of the most important constituencies for government bond purchases, are not so keen. The National Association of Pension Funds, which represents UK schemes worth £800bn, said that while it is keen on long-dated bond issuance as a rule, 100 years was actually too long.

Joanne Segars, chief executive of the organisation, said in a statement: "We don’t think that many pension funds would buy them. Most final salary pension schemes are now closed to new joiners and are becoming more mature. Their liabilities are long-term, but not that long-term."

NAPF argued instead for the government to focus on issuing more 30-, 40- and 50-year index-linked debt, as this is a better match for pension liabilities.

Segars added that the interest payments, or yield, on a potential 100-year bond would also be crucial: "Even if a 100-year bond were attractive in duration, there would be a question mark over whether it would yield a strong enough return for investors.”

However, some were open to the idea in theory at least. One pension-fund manager said this morning: "The theory behind it is good – with a 100-year gilt we are talking about one issued by the British government, but the details need clarification.

"We live in weird and wonderful times – we should look at what the security is of getting our money back. It is like 50-year corporate bonds – a fantastic idea in theory, but you have to be careful where they are coming from. If you look back 50 years, I would have put money in British Steel but laughed at someone who suggested looking at Tesco, for example."

Fund managers, who buy government bonds on behalf of clients including pension funds, also questioned whether investors would be interested.

Dominique Carrel-Billiard, chief executive of Axa Investment Managers, said: “A hundred years is too long to be interesting for a pension scheme. It might be interesting to investors with permanent capital, such as charitable endowments and foundations. It might also be something for grandparents to buy for a new-born child, because the bond will match their life expectancy.”

Nick Gartside, international chief investment officer for equities at JP Morgan Asset Management, said: "I think this tells us about the government’s view on interest rates. Gilt yields are at generational lows and this represents a fantastic time to lock in financing at cheap levels for the government. However, there are two sides to every trade and what represents great value for taxpayers may not represent great value for investors."

Carrel-Billiard also suggested the government could use the bond as an alternative to raising taxes, especially if it made it obligatory for individuals to buy the bond. Raising tax and issuing bonds are alternative ways for the government to raise money.

He said: “Using a bond in place of tax is a creative idea. You could make it compulsory to buy the bond – or you could say, let’s have a national effort, as a matter of citizenship and national solidarity, to buy it – and give some sort of tax break. Personally, I prefer buying bonds to paying tax, because with a bond there is some hope of getting the money back.”